There are a number of reasons why you might need to send money from where you are in India over to the UK.
You may need to transfer money from India to the UK because you’re intending to live there. Or you may have family living in the UK, such as children who are studying, that you want to be able to support for education costs or medical treatment.
The trouble is that transferring money can feel risky, especially using online services. Concerns over both safety and costs can put you off wanting to transfer money abroad.
The 6-step process to transfer money from India
- Open an account. With your chosen provider and set up your transfer.
- Input the correspondent account. Set up the person you’re sending money to, including the beneficiary bank name and account number.
- Verify your identity. This may include providing your PAN or a one-time passcode linked to your mobile number, as well as photo identification and your reason for sending money to a UK bank.
- Choose how to pay. Depending on the provider you use to transfer money from India, you may have to pay via bank transfer.
- Make your payment. Using your bank’s app or website.
- Check your account. Ensure that your transfer has gone through.
There are also a set of rules specific to India set by the government and the Reserve Bank of India that determine how much you can send.
With all this in mind, that’s why it can be reassuring to know that transferring money from India to the UK is not just possible but can be quick, easy, and hassle-free, provided that you know all the different rules that you need to follow.
Best money transfer services to transfer money from India to UK
Below is my list of the best money transfer providers to move money from India to the UK.
Important rules to know for sending money from India to UK
Before you can transfer money from India to the UK, you need to be aware of the rules that India has for outward remittance of Indian rupees to other countries.
Foreign Exchange Management Act
The first reason that there are more considerations when trying to transfer money from India to the UK or any other country in the world is because of the Foreign Exchange Management Act (FEMA) that was passed into law by the Parliament of India in 1999.
FEMA was designed to secure outward remittance in India for the purposes of facilitating external trade and payments while also promoting a foreign exchange market.
This Act governs all transactions involving foreign exchange that involve either capital or current account transactions.
The Liberalised Remittance Scheme
In 2015, subsequent to the introduction of the FEMA legislation, the Reserve Bank of India (RBI) introduced a new set of rules called the “Liberalised Remittance Scheme”.
While there no are limits for how much you can transfer into India, the Liberalised Remittance Scheme imposes strict limits for how much can be transferred out if you live in India and have a resident individual bank account.
These rules state that the maximum amount Indian residents may send abroad each financial year is up to $250,000 (USD), which works out at around £180,000.
This is a cumulative amount, so you could for example make 10 transactions of $25,000 (£18,000) throughout the financial year, which runs from April to March. Or you could send the entirety of the allowance in one transaction each financial year.
The Reserve Bank of India has published full details of the Liberalised Remittance Scheme on its website.
Submitting the necessary “KYC” documents
Under the Liberalised Remittance Scheme, the remittance services you might use must make extensive “know your customer” (KYC) checks. This is to help prevent money laundering and keep overseas transactions safe and above board when sending money abroad.
These documents will depend on your reasons for sending money abroad and may include proof of identification for you and your recipient.
This may include your Indian permanent account number (PAN) or your Aadhaar card.
Check with the Reserve Bank of India if you’re unsure of what documentation you will be required to provide.
How to transfer large amount of money from India to UK
When making an international money transfer from India to the UK, your money will be moved via a process called a wire transfer.
A wire transfer involves moving money electronically via a network of banks or transfer agencies to a bank account of your choice via the Society for Worldwide Interbank Financial Telecommunication (SWIFT) system.
Banks and money transfer companies
When sending money from India to the UK or any other overseas bank account, you typically have two routes to go down: send money via a bank transfer, or use a dedicated money transfer service.
It’s crucial to remember that any bank or money transfer provider you use to transfer money out of India must be authorised by the Reserve Bank of India.
Transferring from your Indian bank account
You can make a bank transfer directly from your Indian bank account to your chosen UK account.
If your bank is international and has a bank branch in both India and the UK, you may be able to save money by using an “interbank” transfer. This is because it costs less for a bank to transfer money to another one of its own branches than it does to transfer to a competitor.
This may include banks such as HSBC or even the State Bank of India.
Foreign currency demand draft
Some banks also offer a service called a “foreign currency demand draft”. Demand drafts are made directly in the currency that you want to transfer into, which in this case is GBP. The equivalent value will then be debited from your bank account in rupees.
Demand drafts are generally considered to be a safer option as they’re made with the beneficiary in mind. This means it is much harder to fraudulently accept a demand draft if it isn’t intended for you.
Demand drafts can also be reissued if they’re lost or stolen before your beneficiary receives them.
The downside to demand drafts is that they can take longer to arrive at their destination, and can also be more expensive than other transfer options.
Using a money transfer service
In recent years, there has been an increase in online money transfers through providers that exclusively operate online.
Money transfer services tend to be associated with lower fees and better exchange rates than banks, generally making them a more cost-effective method than transferring with your bank.
These transfer providers largely operate online, although some do provide physical stores where you can transfer money.
Costs of transferring money
There are two areas where you may see charges applied to your transfers: through transfer fees or through the exchange rate.
A transfer fee is an amount that your transfer provider charges for you to send money overseas.
This may be a flat fee or a percentage-based charge, depending on who you choose to send money from India with.
Naturally, a flat fee is preferable to a percentage-based charge when transferring a large amount.
Banks or transfer services that refer to themselves as free from transfer fees often recoup this money in the form of less competitive exchange rates.
Often, when you’re sending large amounts of money, transfer providers will offer more favourable rates depending on the size of the sum.
The exchange rate for your money is the difference in value between the rupees you send and the pounds your beneficiary receives when you send money.
If you’re able to find a better exchange rate, the more your recipient gets of your money, rather than being kept by your transfer provider.
The exchange rate is particularly important when transferring large sums as a disparity in the value of rupees and pounds becomes greater the more you send.
Who to use to transfer money from India to UK
While many money transfer companies have had permission to make transfers into India for many years, the strict remittance rules set out by the Reserve Bank of India and the government have unsurprisingly meant that many don’t have a licence to transfer from India to the UK.
Should I choose a bank or a transfer service?
There are various pros and cons that you should consider before choosing a bank or a transfer service.
Pros of banks
Bank security is often second to none, meaning you can be confident that your money is in good hands when you make your transfer.
The possibility of an interbank transfer from one branch of your bank in India to another in the UK can potentially see you save money on your transfer.
It’s highly convenient not to have to open a new account with a provider when you’re already a customer with your bank. The time you can save here can be invaluable.
Cons of banks
Uncompetitive exchange rates
Banks often have uncompetitive exchange rates compared to money transfer services.
Expensive transfer fees
Unless it’s an interbank transfer, your bank will likely charge you more for the services than a money transfer provider will.
It can take upwards of seven days for your bank to make your transfer. Meanwhile, many transfer services can transfer your money within 48 hours.
Pros of transfer services
As transfer providers exist exclusively online via their website or apps, their services are quickly and easily accessible.
Most transfer services claim to offer more competitive exchange rates than banks as part of their services, meaning your recipient sees more of the money that you intend to send them.
Lower transfer fees
Transfer providers typically have lower overheads than banks and so will charge lower fees, even on large amounts that you want to send abroad.
Cons of transfer services
Uploading documents online
Transfer providers often ask you to upload identification to their platform to be able to use their services. Having to upload important documentation like this, such as your passport, can feel insecure and risky.
Limited customer support
Many transfer services only have FAQ sections or chatbots for answering customer questions. This can make using a transfer provider feel like a less customer-friendly experience than speaking to someone at a bank.
Most people are now proficient and comfortable using internet services these days. However, individuals who are less confident online may find transfer services more difficult to use than transferring via their bank, even if it is more expensive.
The information in this article does not constitute advice and is based on my understanding of legislation in place at the time of writing which is subject to change.